BILL ANALYSIS
AB 2531
Page 1
ASSEMBLY THIRD READING
AB 2531 (Fuentes)
As Amended April 29, 2010
Majority vote
HOUSING 5-0 LOCAL GOVERNMENT 7-0
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|Ayes:|Torres, Arambula, |Ayes:|Smyth, Torlakson, |
| |Bradford, Eng, Saldana | |Arambula, Bradford, |
| | | |Davis, Solorio, Fong |
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APPROPRIATIONS 12-5
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|Ayes:|Fuentes, Ammiano, | | |
| |Bradford, | | |
| |Charles Calderon, Coto, | | |
| |Davis, Monning, Ruskin, | | |
| |Skinner, Solorio, | | |
| |Torlakson, Torrico | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Conway, Harkey, Miller, | | |
| |Nielsen, Norby | | |
| | | | |
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SUMMARY : Gives redevelopment agencies additional authority to
provide loans, loan guarantees and other financial assistance to
businesses, assist nonprofits and public agencies to establish
small business incubators, and clarifies the City of Los
Angeles' authority to apply for and administer federal funding
for economic development. Specifically, this bill :
1)Allows redevelopment agencies to provide direct assistance to
businesses through loans, loan guarantees, and other financial
assistance in connection with new or existing facilities
within redevelopment project areas for industrial and
manufacturing uses, for the provision or replacement of
machinery and equipment in those facilities.
2)Provides that the assistance is intended to retain or expand
the number of persons employed in the industrial or
manufacturing jobs and to achieve any of the following:
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a) Reduce emissions of greenhouse gases;
b) Increase the use of clean, renewable, or alternative
energy;
c) Increase energy efficiency;
d) Increase the use of recycled and locally sourced
materials;
e) Increase the efficiency in water, wastewater and
stormwater systems;
f) Increase the efficiency of construction methods;
g) Reduce demolition and construction-induced pollution and
waste material generation;
h) Improve indoor air quality;
i) Reduce building operation costs through increased
operation and maintenance efficiency; or,
j) Reduce public infrastructure costs related to
development.
3)States that the Legislature finds and declares that a
fundamental purpose of redevelopment is to attract and retain
business in order to enhance employment opportunities.
4)Adds job training, job placement, apprenticeship and
pre-apprenticeship programs and services relating to
construction or to the operation of businesses in project
areas to the possible uses of redevelopment.
5)Allows a redevelopment agency to assist public agencies or
private nonprofit corporations to establish, construct and
maintain a small business incubator within the project area
for the purpose of redevelopment.
6)Allows a redevelopment agency to make loan guarantees to small
businesses located inside a project area for the purpose of
redevelopment.
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7)Allows redevelopment agencies to construct buildings for
industrial or manufacturing purposes for job training, job
placement, apprenticeship and pre-apprenticeship programs and
services related to construction or to the operation of
businesses in project areas.
8)Allows the redevelopment agency of the City of Los Angeles to
do the following:
a) Prepare applications for state and federal grant
programs that relate to economic development and expend
grant funds inside or outside any redevelopment project
area within the jurisdiction of the agency and comply with
any conditions of the program; and,
b) Accept any assistance from the state or federal
government or any public or private source and expend grant
funds inside or outside any redevelopment project area
within the jurisdiction of the agency and comply with any
conditions of the program.
9)Prohibits a redevelopment agency from amending a redevelopment
plan to increase or extend the project time limits in order to
collect additional tax increment for the purpose of fulfilling
this Act.
10)States this bill is needed to clarify existing law and
provide agencies with additional authority to assist
businesses but may not be construed to restrict the authority
that an agency possessed prior to the effective date of the
bill.
11)Includes a sunset date of January 1, 2016, for all of the
provisions added by this measure.
FISCAL EFFECT : No immediate state effects, since the bill does
not authorize new redevelopment, extend the life of existing
redevelopment, or revise criteria for establishing a
redevelopment agency. Potential long term effects on property
tax revenue growth to the extent that non-traditional uses of
tax increment funds (i.e., job training) result in less brick
and mortar investment, and hence less property tax growth in
redevelopment project areas over time. Such impacts could
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affect other local agencies (i.e., counties and schools) once
redevelopment areas expire and the increment property taxes are
allocated back to the underlying local jurisdictions.
COMMENTS : Legislative findings declare that the fundamental
purpose of redevelopment is to "expand the supply of low- and
moderate-income housing, employment opportunities and provide an
environment for social, economic and psychological growth and
well-being for all citizens."
Under existing law, redevelopment agencies can use tax increment
to rehabilitate commercial buildings or structures with in the
project area and to assist businesses in the financing of
capital equipment provided that the development or
rehabilitation of the property will be used for an industrial or
manufacturing use. Redevelopment agencies can also make loans to
businesses to rehabilitate commercial buildings or structures in
a project area.
This bill would expand redevelopment agencies authority to
provide loans, loan guarantees and other financial assistance to
businesses in redevelopment project areas for industrial and
manufacturing uses if the assistance is intend to retain or
expand the number persons employed. The financial assistance
could be used by businesses to purchase or replace machinery or
equipment in their facility if it achieves any of the following:
a) Reduce emissions of greenhouse gases;
b) Increase the use of clean, renewable, or alternative
energy;
c) Increase energy efficiency;
d) Increase the use of recycled and locally sourced
materials;
e) Increase the efficiency in water, wastewater and
storm water systems;
f) Increase the efficiency of construction methods;
g) Reduce demolition and construction-induced pollution
and waste material generation;
h) Improve indoor air quality;
i) Reduce building operation costs through increased
operation and maintenance efficiency; or,
j) Reduce public infrastructure costs related to
development.
AB 2531
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Job training and placement: Under existing law, redevelopment
is to be used for the "bricks and mortar" necessary to improve a
project area and eliminate blight. This bill would expand
redevelopment agencies authority to expend tax increment on job
training and apprenticeship programs. The bill also gives
redevelopment agencies the authority to construct buildings for
industrial or manufacturing uses that will allow for job
training and job placement.
Business incubators: Up until 1999, redevelopment agencies in
Long Beach, Healdsburg, Los Angeles, Oakland, and Signal Hill
were allowed to assist non-profits and public agencies in
establishing small business incubators, including provided loan
guarantees for small business in the project area. This bill
reestablishes this authority for all redevelopment agencies in
the state.
Federal funding for economic development: This bill also gives
the City of Los Angeles clear authority to apply for and accept
federal funding for economic development and to spend the funds
either inside or outside the project area. According to the
sponsor, the staff with expertise to apply for federal economic
grants and to implement the programs associated with the funds
is redevelopment agency staff. The bill is intended to clarify
that redevelopment staff can be used for this purpose.
The purpose of this bill: According to the sponsor, the City of
Los Angeles, this bill is an effort to expand the ability of
redevelopment agencies to create jobs in the emerging green
sector and create green sustainable communities. Under existing
law, redevelopment agencies have authority to provide financial
assistance to business and property owner to promote job
retention or expansion in connection with sustainable
manufacturing and industrial uses. The sponsor states that this
bill is in intended to "clarify and expand the authority of a
redevelopment agency to provide financial assistance to property
owners and business tenants to retrofit and rehabilitate
buildings in a redevelopment project area to retain or expand
manufacturing and industrial."
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085
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